1)

The difference between a department's gross profit and its direct operating expenses is known as the

(2pts)

departmental gross profit.

departmental operating income.

departmental operating expenses.

departmental direct operating margin.

2)

Leverage is

(2pts)

the ability to earn a satisfactory return on the investments in the business.

the proportion of debt to stockholders' equity.

the ability to pay current debts when they come due.

also called profit margin.

3)

The net income of a company is $175,000. The average book value of the company's assets is $1,300,000. The return on total assets would be

(2pts)

20.00%.

7.43%.

600.00%.

13.46%.

4)

The net income for the year ended was $720,000; total assets at the beginning of the year was $2,100,000; and total assets at the end of the was $2,300,000. The return on total assets would be

(2pts)

1.1%.

3.1%.

11.2%.

32.7%.

5)

The PJC department of McIntyre Company shows gross sales of $730,600 for computer supplies and $934,900 for general office supplies. It has determined that computer supplies cost $534,000 and that general office supplies cost $391,400. What is the gross profit percentage for the PJC department?

(2pts)

$2,590,900

64.32%

1.56%

44.44%

6)

A company has cash, $85,000; temporary investments, $30,000; net receivables, $60,000; and inventory, $350,000. Current liabilities are $300,000. The current ratio is

(2pts)

0.58 to 1.

0.74 to 1.

1.75 to 1.

1.86 to 1.

7)

Departmental reports are useful to management for all of the following purposes EXCEPT

(2pts)

planning.

controlling.

determining revenues generating potential.

determining performance potential.

8)

The cost of goods sold for a company for the year was $1,900,000. Merchandise inventory at the beginning of the year was $125,000 and merchandise inventory at the end of the year was $133,000. The merchandise inventory turnover for the year was

(2pts)

0.1.

14.7.

33.8.

65.5.

9)

The difference between a department's net sales and cost of goods sold is known as the

(2pts)

departmental gross profit.

departmental operating income.

departmental operating expenses.

departmental direct operating margin.

10)

A department may gather operating expense data by maintaining

(2pts)

direct expenses.

indirect expenses.

amounts allocated to each department.

total operating expenses for each department.

11)

The cost of goods sold for a company for the year was $1,600,000. Merchandise inventory at the beginning of the year was $195,000 and merchandise inventory at the end of the year was $205,000. The average number of days that the inventory was held during the year was

(2pts)

8.0 days.

25.0 days.

39.6 days.

45.6 days.

12)

The PJC department of McIntyre Company shows gross sales of $730,600 for computer supplies and $934,900 for general office supplies. It has determined that computer supplies cost $534,000 and that general office supplies cost $391,400. What is the total gross profit for the PJC department?

(2pts)

$934,900

$754,000

$1,590,900

$740,100

13)

Total liabilities divided by total stockholders' equity is the calculation for the

(2pts)

current ratio.

ratio of liabilities to stockholders' equity.

return on equity ratio.

times interest earned ratio.

14)

Normally, the report prepared for a department is a(n)

(2pts)

balance sheet.

income statement.

statement of retained earnings.

cash flow statement.

15)

The net income for a company was $315,000 last year and is $270,000 this year. The percent of increase or decrease was

(2pts)

16.7%.

14.3%.

26.4%.

86.0%.

16)

Dividing quick assets by total current liabilities is the calculation for the

(2pts)

current ratio.

return on investment.

quick or acid-test ratio.

ratio of liabilities to owner's equity.

17)

Dividing the total stockholders' equity by the average number of shares outstanding at the end of the year (if only common stock is outstanding) is the calculation for

(2pts)

book value per share.

earnings per share.

return on equity.

the times interest earned ratio.

18)

Departmental direct operating margin less departmental indirect expenses equals

(2pts)

direct operating expenses.

departmental income.

total operating income.

departmental operating income.

19)

Dividing net sales on account by the average amount of net accounts receivable is the calculation for the

(2pts)

accounts receivable turnover.

working capital turnover.

merchandise inventory turnover.

plant and equipment turnover.

20)

A company has 6,000 shares of common stock outstanding and the total common stockholders' equity is $1,500,000. The book value per share of common stock is

(2pts)

$.004.

$2.50.

$4.00.

$250.00.